Advertisers want to reach streaming video customers, but many of those viewers don’t see ads. Netflix and Amazon Prime are ad-free, and Hulu offers an ad-free option. That means free video-on-demand (FVOD) will become a hot growth area in the next few years.
Look for ad spending on FVOD sites to skyrocket over the next few years. According to a report by Juniper Research, spending on ad-supported free video (such as YouTube and Facebook content) will grow from $16 billion in 2017 to $37 billion by 2022.
This free content will be seen by a global audience of 4.5 billion by 2022, as its attraction will get stronger over time.
YouTube is undeniably the FVOD leader, serving one billion hours of video each day, but it will face more challengers as the market matures. Social media platforms, especially, will use free video to grow their audiences. In 2018, social platforms will see their live video delivery surge, Juniper says. It notes that Instagram currently has over 800 million monthly active users, while Snapchat has 178 million daily active users.
“Juniper expects the OTT video market as a whole to grow considerably over the next 5 years reaching $120 billion by 2022,” notes Lauren Foye, a senior analyst with Juniper. “Whilst SVOD gains considerable media attention, the FVOD market is also set to see significant growth stemming from advertising. FVOD accounts for considerable user interest due to the increasing rise of live streaming. In particular, Juniper notes the popularity of live streaming personalities and celebrities who deliver content such as ‘let’s plays,’ comedy sketches, and product un-packaging. A move to promote live content to social media users—a considerable audience—will aid in boosting FVOD ad spend over the coming years.”
Will YouTube’s recent monetization changes diminish its ad forecast? Juniper says no. While YouTube recently altered its Partner Program so that only channels with over 1,000 subscribers and 4,000 viewing hours in a year are eligible for ads, the site will receive nearly one-quarter of all FVOD ad spending by 2022.
This data comes from Juniper’s report “Digital TV and Video: Networks and OTT Strategies 2017-2022,” which is available for purchase.